Opportunity cost exists because
A) of scarcity.
B) prices must adjust to eliminate shortages.
C) production could not occur without the opportunity cost of using resources.
D) the value of economic goods is positive while the value of goods is zero.
A
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All else being equal, if the prospect of a recession leads the Federal Reserve to ease monetary policy, the equilibrium value of the exchange rate for the U.S. dollar will:
A. fall. B. either rise or fall depending on whether the supply or demand for dollars changes more. C. remain fixed. D. rise.
Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
Although reserve requirements and the discount rate are not actually set by the ________, decisions concerning these policy tools are effectively made there
A) Federal Reserve Bank of New York B) Board of Governors C) Federal Open Market Committee D) Federal Reserve Banks
The United States is best known as a
A) pure price system. B) dictatorship. C) command and control system. D) mixed economic system.